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Gulf steel market awaits Ramadan panacea- 24Jul 11

Gulf Stream has quietened after momentary ripples generated in the aftermath of MENA crisis.
The foisting of billets ,rebar and wire rod prices about a month back both in the Black Sea as well as the Turkish ports. The ripples had a cascading effect on the domestic market as well wherein the stockiest and traders got stuck in a speculative groove vying to replenish skeletal stocks.
The spontaneity of the revival was diluted in less than a fortnight as the demand remained subdued. Mere speculation and re stocking are unsustainable in providing an intransigent ecstasy to the market beset with poor growth and economic activity.
With Ramadan on the anvil (1st to 30th August) activities will be typically on a low key bottling economic activity and ensuing demand for September dream run. With European market still grappling with debt crisis and trying to wriggle out demand is expected to spruce up after summer vacation in Europe. Hence the fundamentals seemed aligned for revival in September which will carry with the momentum till the winter vacation.
Silhouetted in a YoY drop of 10% to 12% in steel consumption Middle Eastern market is groveling in the sand dust. With the anticipated turnaround in construction and allied economic activity September-November operators are pegging their stakes on these forecasts.
Currently rebar transactions are reported at USD 725 per tonne to USD 730 per tonne CNF Dubai on theoretical weight basis and USD 755 per tonne to USD 760 per tonne CNF Dubai on actual weight basis.
Billet offers are prevailing around USD 650 per tonne to USD 680 per tonne FOB Black Sea. It is reported that there is shortage of billets in size 100mm to 130 mm for which mills are booked till August with September booking yet to open. However 150mm billets are readily available at the lower band of USD 650 per tonne FOB. The robust booking of billets has kindled the monster of position cargoes which will take at least 30 to 45 days to ease out before the prices become realistic.
Turkish mills are buoyant with strong domestic demand generated from infrastructural projects. With the scrap levels at USD 460 per tonne to USD 475 per tonne CNF they are rejoicing healthy conversion of nearly USD 300 per tonne leading to contentment.
The domestic mills are offering rebars at AED 2700 per tonne EXW on 120 to 150 days credit. Mills have been attempting to push a hike of another AED 100 per tonne without much success as the buyers are reluctant take positions amidst ambiguity.
In the flat products, heat is on with nearly cut throat competition amongst, Black Sea, Indian, Chinese and Korean mills. It is learnt that Korean and Chinese mills are offering HRC USD 730 per tonne CNF, whereas Indian mills have bettered them at USD 715 per tonne to USD 720 per tonne CNF. Plates from Ukrainian mills are being offered at USD 800 per tonne to USD 820 per tonne with scarce transactions.
Holistically it seems that post Ramadan market will flare up for couple of months concomitantly with improved demand in Europe and China. However towards winter the slump promises to be equally miserable when the X’mas and New Year vacation commences.

(Source: www.steelguru.com )

Jul 24, 2011 11:36
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